Oil prices rose 2 percent on Wednesday as the extension of US-China talks in Beijing raised hopes that the world’s two largest economies would resolve their trade standoff.
US West Texas Intermediate (WTI) crude oil futures were at $50.82 per barrel at 0945 GMT, up $1.04, or 2.09 percent, the first time this year that WTI has topped $50.
International Brent crude futures were up $1.09, or 1.86 percent, at $59.81 per barrel.
Both crude price benchmarks added to Tuesday’s 2 percent gains and have now been on the rise for eight straight days - their longest rally since June 2017.
“After a dreadful December for risk markets, crude oil continues to catch a positive vibe,” said Stephen Innes at futures brokerage Oanda in Singapore, citing tensions between the superpowers which have cast a pall over the world economy.
Signs of progress in Beijing
The trade talks in Beijing were carried over into an unscheduled third day on Wednesday, amid signs of progress on issues including purchases of US farm and energy commodities and increased US access to China’s markets.
“Talks with China are going very well!” U.S. President Donald Trump tweeted, without elaborating. State newspaper China Daily said on Wednesday that Beijing was keen to put an end to its trade dispute with the United States, but that any agreement must involve compromise on both sides.
Citing the trade friction, the World Bank expects global economic growth to slow to 2.9 percent in 2019 from 3 percent in 2018.
“At the beginning of 2018 the global economy was firing on all cylinders, but it lost speed during the year and the ride could get even bumpier in the year ahead,” World Bank Chief Executive Kristalina Georgieva said in a semi-annual report released late on Tuesday.
More fundamentally, oil prices have been receiving support from supply cuts started at the end of 2018 by the Organization of the Petroleum Exporting Countries and allies including Russia.
The OPEC-led cuts are aimed at reining in an emerging supply overhang, in part because US crude output surged by around 2 million barrels per day (bpd) in 2018 to a record 11.7 million bpd.